The German economy is weakening and the Linz-based steel company voestalpine is also clearly feeling the consequences. The company now wants to sell Buderus Edelstahl there and restructure the automotive industry, the group announced on Thursday afternoon. According to the information, this will be accompanied by a one-off write-off of approximately 410 million euros.
The measures will reduce earnings before interest, taxes, depreciation and amortization (EBITDA) from approximately 1.7 to 1.6 billion euros in 2023/2024.
Changed economic conditions
With these measures, the board is responding to the changed economic conditions for production industrial companies and is reorganizing production locations in Germany. Buderus Edelstahl belongs to the High Performance Metals division of voestalpine. Restructuring measures have already been taken in the past.
The division focuses its product portfolio on the technologically demanding segment of high-performance materials. The share of tool steel and structural steel production in the area of “standardized performance” will be reduced.
90 million euros will come into effect
According to the company, the now closed sale and unplanned depreciation in the High Performance Metals Division will result in negative one-off effects on profit (EBIT) of approximately 340 million euros. Of this, “approximately 90 million euros would also be reflected in the EBITDA”.
In the Automotive Components division, management maintains the internationalization strategy and is now “adjusting to the structural underutilization of the automotive supply industry in Germany”. The production network has already been consolidated, Voest said, referring to the sale of the production site in Nagold, Germany.
One-time debit
voestalpine’s Metal Forming division is reorganizing its automotive supply division in Germany and has adjusted its planning assumptions accordingly. According to the group statement, this results in a one-off write-off of approximately 70 million euros.
According to voestalpine’s own information, the above-mentioned effects cause a one-off negative effect on EBITDA of approximately 90 million euros and on EBIT of approximately 410 million euros. Therefore, management had to reduce the EBITDA forecast for the current financial year 2023/24 from approximately 1.7 billion to 1.6 billion euros.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
